Forex Futures Trading

Currency Trading Tips - How to choose the best currency pair to trade Forex

Do any of you have an idea on which currency pairs are best for trading forex? Is the major currency pairs, the pairs of cross or exotic pairs? Well, not really a right and wrong answer, but depends on how you define "better." If a currency pair has tight spreads, it can be regarded as the best pair of currency trading for you, but you can not applied to others. So now we will discuss several factors in choosing a currency pair:

1. Spreads - not always an advantage for trade currency pairs that have a narrow margin in the Forex market. This means that extends less equals more profits, less extends to give a greater margin of fluctuation price if you have a tight stop-loss and spreads can help lower your breakeven point of the carry trade before. Does that make sense to you? EUR / USD is tighter spread 2 to 3 pips for most Forex brokers and up to 1 pip for some runners, while GBP / JPY has expanded from 6 to 10 pips. For some Forex traders who care much about the spreads, is selected from the formal to the second.

2. Fashion - For chartist traders like me, depend primarily technical indicators to help me decide which currency pair to trade currency. Although volatility is considered good, but then more risk and need a wider range of "stop loss". For example, GBP / USD. In my forex trading screen, I have 7 to 8 pairs of currency in smaller windows, so I am able to decide which pair is the most fashionable, even when all the pairs seem to be a trend. While EUR / USD and USD / CHF is negatively correlated 90% of the time, sometimes there is one of the pairs trend better than the other. Therefore you must choose the most fashionable pair to trade with the help of some indicators technical exchange.

3. Trade Sessions - The best time to trade forex is when the market is the most active and therefore has the greatest volume of operations. During the hours of Asia, where Tokyo is opened, the more marketing time is from 7PM EST to 10PM EST. But since not all currency pairs are active in movement, you may want to trade AUD / USD, as it starts to move during the time indicated. When the London market opens, this is where you can operate almost all currency pairs. I trade 3 a.m. ET to 6am EST according to the trendiness of the couple; example is GBP / USD, EUR / USD, etc. Another negotiating session will experience high volatility is from 8AM to 12 p.m. ET EST where both the London and U.S. markets are open at the same time.

After looking at the factors above, do you think there's an answer right and wrong in choosing the best currency pair currency? I doubt so. While you are using a forex trading system reliable that helps you, all currency pairs can be profitable. To learn more about the behavior of currency pairs, you can find it in my free forex ebook with a forex trading system that can help you generate profits consistently.

About the Author

To learn how to trade forex successfully using a simple, time-tested and proven forex trading system, download my FREE 56-page "Forex Trading To Riches" ebook at http://www.forextradingpower.com.

The author, Daniel S, is the owner of http://www.ForexTradingPower.com where you can get free premium forex trading tips and resources. Daniel S. specializes in teaching real people how to trade the Forex market for long term financial success.

Lesson 27 - Trading The Exotics Part1

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